McGuffin Corporation factored $100,000 of accounts receivable with Huskie Financing. The finance charge is 3% of accounts receivable, and 5% of accounts receivable was retained to cover sales discounts, sales returns, and sales allowances.

Required - Deliverable

(1) Prepare McGuffins journal entry to record this factoring of its accounts receivable assuming the factoring was without recourse.

(2) Prepare McGuffins journal entry to record this factoring of its accounts receivable assuming the factoring was with recourse and that McGuffin estimates the recourse obligation at $5,000.